Publications
Current Expected Credit Losses and Consumer Loans, with Joao Granja,
Journal of Accounting & Economics, 101781
We use data from TransUnion, a large U.S. credit bureau covering millions of individual consumer loans, to examine the transition to the Current Expected Credit Loss (CECL) accounting standard and to provide novel evidence about the impact that raising reserve requirements has on banks' pricing and lending decisions in the U.S. consumer lending market. We find that greater reserve requirements following the adoption of CECL induce a statistically significant but economically moderate increase in loan interest rates. The effects are more pronounced for weakly-capitalized banks and even more so for underprivileged individuals borrowing from weakly-capitalized banks. Our evidence informs the ongoing policy debate between standard setters and members of the financial industry about the potential effects of CECL on credit markets.
Data and Welfare in Credit Markets, with Mark Jansen, Constantine Yannelis, and Anthony Lee Zhang,
Journal of Financial Economics, Volume 174, December 2025, 104171
We show how to measure the welfare effects arising from increased data availability. When lenders have more data on prospective borrower costs, they can charge prices that are more aligned with these costs. This increases total social welfare and transfers surplus across borrower types. We show that under certain assumptions the magnitudes of these welfare changes can be estimated using only quantity and price data. Applying our methodology to bankruptcy flag removal, we find that in a counterfactual world where bankruptcy flags are never removed from credit reports, previously-bankrupt borrowers’ surplus decreases substantially, whereas efficiency increases only modestly.
Working Papers
The transmission of corporate tax cuts to consumer loans: Evidence from the TCJA, with Joao Granja and Arndt Weinrich,
Using data from a major U.S. credit bureau, we analyze how cuts in bank income taxation affect consumer loan interest rates and sizes. Exploiting the TCJA corporate tax cut and using tax-exempt credit unions as a control group, we find lower auto loan rates for both high- and low-credit quality borrowers. We develop a parsimonious model to identify the economic mechanisms of tax incidence in consumer credit markets. Consistent with the model, transmission to consumer interest rates is stronger for better capitalized banks, weaker for highly leveraged banks, but shows limited sensitivity to market power or selection.
R&R at Journal of Finance
This paper studies how debtors report financial information conditional on default. Exploiting audits of consumer bankruptcy filings, I show that material misstatements occur in 20-30% of audited Chapter 7 filings and are concentrated in income tied to repayment capacity and Chapter 7 eligibility. Many misstatements appear confused, yet reported means-testing income bunches below exemption thresholds and income misreporting rises with true disposable income, consistent with some strategic reporting in default. In Chapter 7 cases, audits raise (abuse) dismissals on average and generate effects that are large relative to plausibly exogenous variation in trustee strictness.